Mine Taxation in Ontario

MINING taxation is a subject which bears definitely upon-the welfare of the mining indus-try. Every government must have a revenue but that revenue should be raised in such a way as to hamper as little as possible legitimate enterprise or industry. A mining tax should be fair, and one which appeals to the natural sense of justice. Our present system is a tax on net- profits after all expenses are met. On profits in excess of $10,000 the Mining Tax Act takes three per cent., one-half of which goes to the Govern-ment and one-half to the municipality in which the mines are situated, to meet local needs for roads, schools, etc. On profits from one to five million dollars", the tax is five per cent.; over five million, six per cent., and so on. The first $10,000 profit is exempt. The result is that if a mine is worked at a loss, it pays no tax at all; if it makes a small profit, it pays a small tax; if profits are large, the tax increases accordingly. It is difficult to imagine a fairer or less onerous method of taxation, or one better adapted to meet fluctuating conditions from year to year as profits rise or fall. A just and fair tax should be levied on profits, never on capital. There is, one branch of the mining industry upon which is levied a higher tax than upon other branches, namely, the nickel industry. I see no good reason why any branch of the mining industry should be discrim-inated against on a profits tax basis. A mining tax should not discourage development. The present tax meets this requirement. In the early years of a mine, when it is all outgo and no income, the mine pays no tax. Not until it reaches a productive and. profitable stage does the tax take effect, and then the mine can afford to pay it. Further, a tax on profits does not operate against the opening up of low-grade deposits, or those in which the chance of success is to a certain extent speculative.